Reporters Cover Spectrum of Issues as Oil Price Soars

By Kevin Sweeney
April 21, 2006 12:01 PM

With the price of oil seemingly setting a new record every day, business reporters are trying to put consumer reaction into context for their readers.

From the driving behaviors of motorists to prices across other sectors to government response, the nation's business journalists are covering a wide spectrum of issues.

On Friday morning, the price of oil surpassed a new record of $73 a barrel. Average gas prices in the U.S. settled at $2.88 a gallon, according to Gasbuddy.com.

Global tensions have been widely reported as the catalyst for the oil price increase. But domestic concerns center largely on the hits taken by the American wallet.

"Last month gas use fell 0.6 percent compared with the period last year, according to figures from the American Petroleum Institute," CNN/Money reports. "The average price of gasoline is 27 percent more expensive than last year."

And it's not just the gasoline sector that is subject to decreased use as the price of oil gushes to new levels. The cost of transporting a wide array of goods will also trickle down to higher price tags for consumers.

"Prices rose broadly last month for items such as food, housing, clothing, medical care, recreation, transportation, education and communication," reports Nell Henderson in The Washington Post. "The core CPI rose 0.3 percent in March, its fastest pace in a year, suggesting that more businesses are boosting prices to cover their higher costs of moving goods, paying electricity bills and heating their stores and offices."

Already struggling to post positive profits, the beleaguered airline industry is facing even tighter constraints from the price of oil. United Airlines, which just emerged from Chapter 11 in February, did so with a plan that grossly undershot the current price of oil.

Mark Skertic of The Chicago Tribune says that United had priced oil at $50 a barrel in its restructuring plan. Consumers should brace for rate hikes in the air to cover this price surge.

"One airline leader on Wednesday predicted price hikes on everything from fares to curbside check-in to food," Skertic writes. "Carriers that have fuel hedges in place have given themselves some protection. ... But those revenue increases have not been enough to allow most carriers to show a profit."

Everyday citizens are not the only ones who have something to say about skyrocketing prices. Congressional representatives are pushing for reform and calling on the president to take action.

"Fed up with what he calls price-gouging by the major oil companies, Rep. Bernard Sanders, I- Vt., on Wednesday called on President Bush to convene an emergency summit of congressional leaders, oil industry executives and consumer advocates to address the soaring price of gasoline," according to Bruce Edwards of The Times Argus in Vermont.

Should the oil market continue to soar, expect the volume on the debate to be turned up dramatically. And expect business reporters to continue to monitor the reverberations on the market as a whole.

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